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Quantum Technologies operates multiple segments. The following financial statements apply to the segment named Theta Segment. Theta Segment Income Statement for the Year Ended December

Quantum Technologies operates multiple segments. The following financial statements apply to the segment named "Theta Segment."

Theta Segment Income Statement for the Year Ended December 31, Year 13:

  • Sales Revenue: $400,000
  • Cost of Goods Sold: $250,000
  • Gross Margin: $150,000
  • Operating Expenses: $70,000
  • Depreciation Expense: $30,000
  • Operating Income: $50,000
  • Nonoperating Income: $30,000
  • Loss on Sale of Equipment: $10,000
  • Net Income: $70,000

Theta Segment Balance Sheet as of December 31, Year 13:

  • Cash: $45,000
  • Accounts Receivable: $70,000
  • Inventory: $85,000
  • Equipment (less accumulated depreciation): $130,000
  • Total Assets: $330,000
  • Accounts Payable: $40,000
  • Notes Payable: $50,000
  • Stockholders' Equity: $240,000

Required:

  1. Compute the ROI for Theta Segment.
  2. Quantum Technologies has a target ROI of 19%. Theta Segment has an investment opportunity of $200,000 at an ROI of 21%. Calculate the new ROI if the investment is made.
  3. Determine the net profit margin for Theta Segment.
  4. Calculate the asset turnover ratio for Theta Segment.
  5. Evaluate whether Theta Segment achieved the desired ROI after the new investment.

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